Terms of trade and economic growth in Japan and Korea: An empirical analysis

Wong, Hock Tsen (2010) Terms of trade and economic growth in Japan and Korea: An empirical analysis. Empirical Economics, 38 (1). pp. 139-158. ISSN 0377-7332

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Official URL: http://dx.doi.org/10.1007/s00181-009-0259-9

Abstract

This study examines the impact of terms of trade and terms of trade volatility on economic growth in Japan and Korea using time series data. The results of the Johansen (1988) cointegration method show that real gross domestic product (GDP) per capita and terms of trade are jointly determined. Generally, an increase in terms of trade volatility will lead to a decrease in real GDP per capita. An increase in oil price will lead to a decrease in terms of trade. The results of the generalised forecast error variance decompositions show that the important contributors to real GDP per capita are different between Japan and Korea. A favourable and a less volatile terms of trade are important for economic growth. © Springer-Verlag 2009.

Item Type:Article
Uncontrolled Keywords:Cointegration, Economic growth, Japan, Korea, Terms of trade
Subjects:H Social Sciences > HC Economic History and Conditions
Divisions:SCHOOL > School of Business and Economics
ID Code:2147
Deposited By:IR Admin
Deposited On:09 Mar 2011 14:37
Last Modified:18 Feb 2015 10:23

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